Low carbon in the National Capital Region’s buildings

From: Public Services and Procurement Canada

Learn how the Energy Services Acquisition Program will modernize the system that heats 80 buildings and cools 67 federal and non-federal buildings in the National Capital Region and how it will help the government to meet its goal of reducing the greenhouse gas emissions (GHG) in its own operations by 40% by 2030.

On this page

Heating and cooling buildings in the National Capital Region

Eighty buildings in Ottawa, including the Parliament Buildings, are on a district energy system that connects to central plants using over 14 kilometers of underground piping to provide heating by steam and cooling by chilled water.

The current system was built between 50 and 100 years ago. It uses outdated technologies and many of its components are at the end of their service life. In the same way that you might replace an old furnace in your home with a more energy efficient model, we are modernizing the system to both cut greenhouse gas emissions and save money.

Infographic: How district energy works

Energy Services Acquisition Program: How district energy works - image description below

Click on the image to enlarge.

Image description

The infographic title is Energy Services Acquisition Program: How District Energy Works. It depicts a cityscape, with a cluster of high-rise buildings including the Centre Block of the Parliament Buildings. On the far left is an industrial-type building with steam coming out of chimneys, representing a central heating and cooling plant.

In front of the buildings is a road with several vehicles. Below the road are lines underground showing how the heating and cooling plant is connected to the buildings through red and blue lines, with arrows pointing up. The lines represent pipes that circulate hot water, steam and chilled water.

Three blocks of text are shown above the buildings:

  • A district energy system is a set of central plants that heats buildings with hot water or steam and cools buildings with chilled water. They are used all over the world
  • This uses less energy and is more efficient than having equipment in each individual building
  • The government district energy system in Ottawa serves more than 80 buildings, including the Parliament Buildings. It is being modernized to cut greenhouse gas emissions and costs

One block of text is shown below ground on the lines representing pipes:

The water circulates through underground pipes connected in a loop.

At the bottom of the page there is a quote from the United Nations Environmental Program report, District Energy in Cities: Unlocking the Potential of Energy Efficiency and Renewable Energy:

… modern district energy systems in cities is one of the least-cost and most-efficient solutions for reducing greenhouse gas emissions and primary energy demand

Benefits for Canadians

The Energy Services Acquisition Program will modernize the district energy system that heats 80 buildings and cools 67. This will in turn reduce greenhouse gas emissions, save money and improve safety.

By modernizing this system we have an opportunity to contribute to climate change commitments by:

  • transitioning to a low-carbon economy
  • stimulating the clean technology sector

Green heating and cooling plants

The Energy Services Acquisition Program will modernize the plants and the distribution network that heat 80 buildings and cool 67.

Stage 1: Implementing newer technologies from 2017 to 2025

The first stage of the program will:

  • convert the system from steam and high temperature hot water to low temperature hot water
  • switch from steam to electric chillers
  • use Smart Building technology to pinpoint opportunities for better energy efficiency

These actions, combined with past initiatives will reduce greenhouse gas emissions by an estimated 63%. This is the equivalent of taking 14,000 cars off the roads in Canada.

The construction will start in 2020 and will be completed by 2025.

In the first stage we will also test low carbon fuels like biomass and bio-oil to replace natural gas and other fossil fuels.

Stage 2: Using alternative fuels for the future starting in 2025

The conversion to low temperature hot water will create a bridge to low carbon energy and opportunities for even greater environmental benefits.

At this stage, natural gas will be replaced for peak load, with low carbon fuel sources such as:

  • biomass
  • solar
  • industrial waste recapture
  • green gas from natural sources
  • waste to energy
  • geo exchange

We estimate that this will reduce greenhouse gas emissions by an additional 28%. This is the equivalent of taking an additional 7,000 cars off the roads in Canada.

We will also expand the network to more buildings. The buildings currently on the network could potentially be increased to 600, which would triple the overall greenhouse gas reduction. 

Animation: Energy Services Acquisition Program

Transcript: Energy Services Acquisition Program

Video length: 1:23 minutes

Start of a clip

(On screen a graphic image of the bars and leaf of a Canadian flag changing from red to green.)

Text displayed: The Government of Canada is greening.

(A graph showing greenhouse gases (GHGs) on the vertical axis and years on the horizontal axis, with markings for the years 2005, 2025 and 2030. A jagged line moves down from the top left to the bottom right.)

Text displayed: We’re cutting greenhouse gases (GHGs) from federal operations by 40% by 2030 at the latest.

(A cityscape with a cluster of high-rise buildings including the Centre Block of the Parliament Buildings and an industrial-type building representing a central heating and cooling plant. In front of the buildings is a road with several vehicles moving along in both directions. Below the road red and blue lines, with arrows pointing and moving upwards, represent pipes that circulate water and steam.)

Text displayed: One major project that will get us there is the modernization of the network of plants that heat and cool 80 buildings in the capital.

(Columns of cars build one by one, 5 cars in the first column, 6 in the second and 7 in the third.)

Text displayed: Stage 1: Modernization - These changes will be the equivalent of taking 14,000 cars off the road.

(A thermometer showing red to the top at first and then falling as a counter shows a reduction from 195 to 70 degrees Celsius, with the numbers dropping alongside the red line.)

Text displayed: This includes: Using lower temperature water instead of steam.

(An electrical plug with a green cord that goes down and then around the plug, turning into a leaf as it becomes a full circle.)

Text displayed: This includes: Switching from steam to electric chillers.

(A five-story building connected by an arrow to a circle with a leaf in it.)

Text displayed: This includes: Implementing Smart Buildings.

(On screen are three windmills and then a tractor drives across from left to right as 3 trees appear behind it, each shedding a few leaves.)

Text displayed: Our vision is to switch to low carbon energy sources.

(High rise buildings pop up one-by-one into a cluster of 15.)

Text displayed: And to increase the number of buildings on the new system.

(The same columns of cars seen earlier reappear and then shrink as 5 more columns appear to the right, each higher than the last, with the last column having 12 cars.)

Text displayed: Eventually, the total reduction in GHGs could be the equivalent of taking 60,000 cars off the road.

(A bar graph shows a column headed “Energy usage” going down while a column headed “Cost savings” goes up.)

Text displayed: Using less energy will also generate annual cost savings.

(A yellow construction hat appears on the right of the screen, and three buildings under construction and a crane appear on top of it.)

Text displayed: Construction will start in 2020 and will be completed in 2025.

(Energy Services Acquisition Program)

Text displayed: For more information contact us at Canada.ca/greening-government

(Canada wordmark)

(Public Services and Procurement Canada departmental signature)

End of clip

Frequently asked questions

Find the answers to frequently asked questions about the Energy Services Acquisition Program.

What is a district energy system?

A district energy system is made up of central plants that heat buildings with hot water or steam and cool buildings with chilled water. The water circulates through underground pipes connected in a loop. This process uses less energy and is more efficient than having equipment in each individual building.

District energy systems are used around the world. According to the United Nations’ Energy Program modern district energy systems in cities “is one of the least-cost and most-efficient solutions for reducing greenhouse gas emissions and primary energy demand” (District Energy in Cities: Unlocking the Potential of Energy Efficiency and Renewable Energy).

Consult also the infographic: How district energy works.

How does the program fit with other government efforts to meet its targets for greenhouse gas reductions?

In the Pan-Canadian Framework on Clean Growth and Climate Change we commit to reducing greenhouse gas emissions across all parts of the economy and all parts of the country to protect the environment while driving innovation and increasing the adoption of technology.

The Federal Sustainable Development Strategy commits the Government of Canada to becoming a leader on climate change.

The Greening Government initiative, led by the Treasury Board of Canada Secretariat, commits the Government of Canada to leading by example and greening its own operations by reducing emissions from our buildings and fleets by 40% below 2005 levels by 2030 at the latest. The first stage of the Energy Services Acquisition Program will cut greenhouse gas emissions by 63% below 2005 levels and future plans include carbon neutral energy sources and working to increase the number of government buildings on the network.

Have employees been involved in the planning for the modernization? When did employees find out about Energy Savings Acquisitions Program and/or the modernization project? Has the Union been involved in the planning?

PSPC has been working closely with plant employees, and their local and national unions in preparation for the modernization. They have been engaged since 2010.

Union-Management Coordination Meetings have been on-going for some time now, and a Joint Workforce Management Committee was established in May 2019 and will continue to meet until at least March 2020, when the system operation is formally handed over to the private sector operator.

Will current employees lose their jobs?

Energy Savings Acquisitions Program (ESAP) has been planning for the modernization of the district energy system for several years through funds provided in Budget 2016. Over that period, employees and local and national unions have been engaged in the ongoing planning of the project and the P3 procurement.

A ‘stay back’ team of PSPC employees will be set up to monitor the contract and the performance of the winning consortia. Current employees will have an opportunity to join this team.

PSPC will support all employees through their transition to new roles. The department is committed to respecting employees and honouring all its obligations under the collective agreement.

When will the new system be up and running?

This is a long term project that will put the structure and process in place for managing the system for 30 years. The new technologies will be implemented between now and 2025. The public-private partnership (P3) contract was awarded in May 2019, with conversions completed by 2025. The operations and maintenance contract will be for 35 years, from 2020 to 2055.

Why not shift to low carbon energy sources now?

The conversion to using low temperature hot water opens up possibilities for using low carbon renewable energy sources.

In the first stage of the program, between now and 2025, we will be converting the buildings and testing new fuel sources.

Why not make buildings more energy efficient instead of spending on a new heating and cooling system?

We’re doing both. Find information on energy consumption in commercial and institutional buildings in Canada.

Why are you conducting a public-private partnership?

The modernization project will be delivered through a public-private partnership under the responsibility of PSPC that balances risk sharing between the government and the private partner and provides financial certainty to the government and to taxpayers. The PPP offers guarantees that the system will be well maintained for the duration of the contract which is from 2020 to 2055.

Is Public Services and Procurement Canada privatizing the heating and cooling plants?

PSPC is not privatizing the heating and cooling plants or the distribution network, otherwise known as the district energy system. PSPC is retaining these assets. The PPP will modernize, operate and maintain the plants and distribution systems. Presently, two out of the five PSPC heating and cooling plants are operated by private sector operators – Tunney’s Pasture and the National Printing Bureau. A sixth plant, servicing the former RCMP Nicholson Campus, is also operated by the private sector but it is scheduled to be decommissioned.

How is Public Services and Procurement Canada ensuring the safety and security with the move to a public-private partnership?

The private sector operator will be subject to the same health and safety regulations and standards as the Government of Canada, once they take over operations. In addition, the contract will include provisions to hold the private sector operator accountable to performance standards.

The Government of Canada retains control of the security process including monitoring of all of our retained assets. As a result, physical security will not be impacted. The private sector operators of the 2 heating and cooling plants have the same security clearances and must meet the same strict security requirements and standards which applies to the PSPC operators.

Will anything need to be updated in the user buildings that are connected to the district energy system?

Yes. We have begun converting the user buildings that are connected to the district energy system in order to accommodate the modernized plants and distribution network. The conversion, which includes changes to building systems such as heating, ventilation, air conditioning, and domestic hot water, will allow for the update from steam or high temperature hot water, to low temperature hot water. Each user building conversion is distinct, with unique considerations such as tenants/occupancy, heritage elements, and technical complexity.

Will this work have any impact on heritage properties?

All work completed on heritage properties will be done in a way that maintains the integrity of the building and responds to the core needs of occupants. The work will not have a deleterious impact on heritage properties.

What buildings are served by the existing Direct Energy System?

Public Services and Procurement Canada (PSPC) is responsible for providing heating to 80 buildings in the National Capital Region (total floor space of 1.83M  which houses more than 50,000 public servants) and cooling services to 67 of these buildings (total floor space of 1.73M ). PSPC operates five central heating and cooling plants (CHCPs) and four distribution networks. The five CHCPs were designed and built from 1916 to 1971.

Commercial opportunities

A public-private partnership (P3) is being used to manage the modernization through a long term contract that leverages the strengths and resources of industry. There will be commercial opportunities at various stages available on buyandsell.gc.ca.

An Archived—Letter of interest (EP-635-173247/A) was published in March 2017 to inform industry of upcoming contracting opportunities.

The Request for qualification—ESAP (ES635-173247/B) was published on August 31, 2017 to evaluate interested companies and consortia on their experience in projects of similar size and complexity and to develop a short list of three potential proponents to continue to the request for proposals stage.

The request for proposals was shared with qualified proponents in early 2018 and will set out the conditions and specifications of the project. The qualified proponents submitted binding technical and financial proposals. A contract was finalized with a private sector partner in the spring of 2019.

Latest news about this initiative

Related links

More information

Contact the Real Property Branch

Date modified: